The current shifts against StreamCast
A federal judge in Los Angeles broke new legal ground today, and his decision could bury StreamCast Networks. Applying the new standard laid out by the Supreme Court in MGM v Grokster, U.S. District Judge Stephen V. Wilson held that StreamCast was liable for music and movie piracy committed by people using the company's software, including the Morpheus file-sharing program. Under the Grokster standard, a company that actively promotes piracy or bases its business on it can be held liable for its customers' copyright infringements. The standard isn't terribly clear, however, because the ruling laid out a series of factors to consider on both sides of the issue.
All the same, Wilson's ruling wasn't much of a surprise. StreamCast had been one of three main defendants in the Grokster lawsuit, and the other two -- Grokster and Sharman Networks, distributor of the Kazaa file-sharing software -- had already agreed to pay multi-million-dollar settlements to the record companies, music publishers and movie studios in the wake of the Supremes' ruling. So had the companies behind several other leading file-sharing networks, including Bearshare and eDonkey, who weren't targeted by the Grokster lawsuit. StreamCast had tried for months to settle, too, only to have the talks collapse.
Wilson cited numerous statements internal e-mails by current and former StreamCast executives that showed their awareness of users' infringements, their eagerness to insure the supply of copyrighted content on the network, their implementation of features that made it easier to infringe, and their rejection of technology that could have deterred some infringements but also driven away users. "StreamCast's promotional efforts, internal communications, advertising designs and actual advertisements constitute clear expressions of unlawful intent," he wrote, and later added, "Evidence of StreamCast's objective of promoting infringement is overwhelming."
This condemnation, remember, comes from a jurist who ruled in 2003 that StreamCast had *not* violated copyright law because its software was protected by the Supreme Court's 1984 ruling in the Sony Betamax case. Like the manufacturer of a VCR, Wilson reasoned, StreamCast could not monitor or control its users' infringements. His ruling was upheld by the 9th Circuit before the Supreme Court unanimously disagreed and sent the case back to Wilson for reconsideration in light of the new inducement standard.
The StreamCast ruling adds a degree of clarity for other file-sharing companies (most notably LimeWire, the biggest player still in the record companies' cross-hairs), who now have a concrete example of what it means to induce infringement. More significant, though, may be Wilson's denial of StreamCast's request for more time to prove that the entertainment companies misused their copyrights. Every file-sharing company sued by the entertainment industry has offered a similar defense, which goes something like this: the labels and studios abused their copyrights in an attempt to control the market for downloadable music, and consequently are barred by law from collecting damages for any infringements. They base their claims on the fact that the labels and studios have created joint ventures to sell their songs and movies online, but they refuse to offer file-sharing companies the licenses they need to do the same. Wilson wrote that a misuse defense is applicable only when companies extend their copyrights "into ideas or expressions over which they have no legal monopoly." Their copyrights give them a legal monopoly over the reproduction and distribution of their artists' songs, Wilson noted. If the labels and studios colluded to deny licenses to StreamCast, that might violate antitrust law, but it wouldn't be a misuse of their copyrights.
Wilson's reasoning may help the entertainment industry in the long run, but they may not make much difference on the major labels' next legal battle. LimeWire's counterclaims, which are being heard in federal court in New York, are largely based on federal anti-trust statutes and New York state business-practices laws, not copyright law.
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Legal splitting-of-hairs aside, it's easy to see some legitimacy on the industry side. Music companies and artists don't get paid for p2p music.
On the other hand, it should be noted that music companies have been ripping off artists for years, blocking access to "the system" by new and innovative artists for years, serving up pablum and rehashed formulaic junk that passes for music for years, using payola scams to promote their lame so-called music, and preventing listeners from hearing or getting access to all sorts of exciting and diverse music, by restricting us to tightly-controlled music outlets on commercial radio and in corporate record stores. The biggest crime is that the US music industry has destroyed the musical landscape in this country so completely, that many readers of this blog probably don't even realize how bereft our musical taste has become in this country, due to it's corporatization.
In a sense, P2P is an act of listener-survival, or civil disobedience, necessitated by the cultural starvation we've endured for decades under the total domination of the RIAA-affiliated music companies.
More on media domination:
www.inyourear.org
-johny radio
Posted by: johny radio | September 29, 2006 at 10:02 AM
Hmmm. It seems odd to rail against the music companies’ control at a time when it’s easier than ever to discover the work of unsigned and independent-label artists. That increase in exposure (through legitimate channels such as online radio, MySpace.com, eMusic, Rhapsody and even TV-show soundtracks) has translated into a growing market share for indie artists. P2p, after all, is a terrible music-discovery tool, given that you have to know what you’re looking for in order to find it. There’s no mechanism there to tell you that if you like Steely Dan, you’ll like Weekend.
And as much as I feel for artists who are struggling with major-label contracts, no one forced them to sign with a major label. They did it despite the well-known dangers of major-label contracts because, at least for now, the majors represent the only way to become filthy rich as a musician. Not the only way to make a living, or even a good living – you can do that as an indie band, and thousands do. But if you want to roll like Snoop, you’ve gotta sell like Snoop, and doing so requires a deal like Snoop’s.
That’s why it seems absurd to me to argue that it’s okay to copy music online without paying for it because the labels victimize their artists. First off, you don’t know the specifics of the artist’s deal – how many millions they received up front, whether the labels have recouped their advance, how much control they have over promotional spending, etc. And second, downloading for free instead of buying may not take money out of a poor band’s hands, given that most were paid up front, but it certainly doesn’t help a band get out of debt to its label.
Finally, as for the major labels somehow ruining music, the public alone is responsible for the nation’s musical tastes. Sure, the major labels pump out a fair amount of drivel in addition to the occasional Radiohead, Led Zeppelin or Hot Chip, but nobody makes you buy the crappy stuff or listen to it on the radio. To say p2p liberates people from the major labels’ domination is to suggest that people are somehow incapable of finding the good stuff – e.g., KCRW’s online stations, eMusic’s vast catalog of indies or Pandora’s indie-stocked recommendation engine – on their own. And that’s kinda sad, isn’t it? Are we that helpless?
Posted by: Jon Healey | September 29, 2006 at 10:35 AM